Horrible situation - Need financial advise on how to bounce back

[Anonymous]

Hello,

I have acquired a lot of credit card debts over the past 3 years due to poor judgements on my part but now I am looking to bounce back and make a solid plan of how to get rid of this massive debt. My total debt is close to $52,000. Credit card debt is as follows:

Bofa - $41000

Citibank 1 - $596

Citibank 2 - $308

Amex 1 - $1900

Amex 2 - $7197

Discover - $1500

I tried applying for debt consolidation loans but was denied from multiple places. So I thought my best plan would be to pay credit cards for now. My APR on BOFA is 23% it is a cash rewards preferred card. I know that this interest is killing me. I will try calling them and see if they can reduce my APR.

My monthly income after taxes is $5100. I am not sure how should I approach this. My expenses are close to $3200 a month so I have around $1900 remaining to pay my credit card debts.

Any and all advise would be really appreciated.

[FireMedic1]

Well at least your going to tackle this debt. You can ask BoA for a lower interest rate. It may help some if approved. With everyone hiring everywhere. You could find some PT work for extra income. You could try to start paying off the lowest balance card. Once at $0. Take that $ and then hit the next one. Then when thats $0. Now you have more $ and go after the next one. Once Citibank, Amex, and Discover is fully paid. Then you'll be able to hit up BoA with all you were paying before combined. It will take 22 months without a side job. Less time with extra income.It can be done. Dont use the cards at all. Live off the Debit card until complete. Seems like it may take a long time. But it goes by fast. Best of luck! Keep us updated.

[rostrow416]

I agree with the above.....paying down the smallest balances first and minimums to the other cards can leave you with 4 cards with a $0 balance in 4-5 months.  At that point you can work on the $7k balance which will probably take about 5-6 more months.  But by this time next year, you will be able to put everything towards the BoA account.   And even though it may take another 20+ months, it will get paid down.  (This is assuming income and available cash remain constant).

[Trigunn423]

I would approach it this way:

That 1900/2= Roughly 950/check. (assuming bi-weekly pay)

Can you comfortably live on $450 for 2 weeks? 

I would take $500 each week and apply it to the two cards with the lowest balance. You'll pay them off in the month plus around 80 on another card. (December)
January I would pay $500 per check to the discov 1500 card. February's 1st check will be the last payment to that card. It'll be 0.00 balance. You'll have 3 cards with a 0.00 balance.

By this point there should be around what $100 extra from the min payments you've been paying? Take that 100 and add it to the $500 you have. Apply the $600 to the Amex card and again should take around 3 paychecks (600+600+500=1700) By around Aprilish you'll be 4 cards down and ready to tackle the 7k and 41k. 

Here is where I disagree with the others. I would not start working on the 7k debt alone. I would tackle both debts head-on: split your 1k/month payment across the two and be aggressive with it. Apply the savings from the other cards (those min payments you don't have to pay anymore) and apply it to the card with the lowest interest. 

[Anonymous]

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@Trigunn423 wrote:

I would approach it this way:

That 1900/2= Roughly 950/check. (assuming bi-weekly pay)

Can you comfortably live on $450 for 2 weeks? 

I would take $500 each week and apply it to the two cards with the lowest balance. You'll pay them off in the month plus around 80 on another card. (December)
January I would pay $500 per check to the discov 1500 card. February's 1st check will be the last payment to that card. It'll be 0.00 balance. You'll have 3 cards with a 0.00 balance.

By this point there should be around what $100 extra from the min payments you've been paying? Take that 100 and add it to the $500 you have. Apply the $600 to the Amex card and again should take around 3 paychecks (600+600+500=1700) By around Aprilish you'll be 4 cards down and ready to tackle the 7k and 41k. 

Here is where I disagree with the others. I would not start working on the 7k debt alone. I would tackle both debts head-on: split your 1k/month payment across the two and be aggressive with it. Apply the savings from the other cards (those min payments you don't have to pay anymore) and apply it to the card with the lowest interest. 

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This plan will not work, you still have to satisfy the minimum monthly payment on your $41k and $7K debt.  What is the minimum payment for each account?  Whatever left over is all you can applied to the lowest amount.  I also don't know what other posters are thinking when they said you can pay it all in 20-ish months, not realistic at current interest rate.  Even if you do get interest reduced, or even zero'd, you are still looking at 30+ months.  

By applying all your funds, can you realisticly live the next 3 years on shoe string budget?  Life happens, do you have emergency funds for those?  Speaking from experience, you will have months of not being able to pay anything but monthly minimums.  It will be very tough and slow going.  

[Anonymous]

First step is admitting...

Look at the Cards and start paying them off, start with the lowest balanced card and work it to the top. The key is not to run them up after paying them off.

I was somewhat in your shoes about 12 years ago, it works..

I use one card and pay it off at the end of month, then I have the travel card....